JPMorgan Chase upgraded Blackstone to overweight from neutral on Tuesday, calling the money manager “best in class.” The call follows the recent controversy over private equity investment trust Blackstone. The firm suspended withdrawals from the $69 billion fund, BREIT, in November and December after receiving redemption requests that exceeded the monthly NAV limit and the quarterly limit of 5%. Investors appear to be aware of the risks to Blackstone’s retail, private equity and real estate businesses, driven by higher inflation and interest rates, JPMorgan analyst Kenneth Worthington said in a note on Tuesday. “However, we see a retail franchise still intact and positioned for stronger growth over the medium term, such a strong performing property franchise that we expect to grow from even if this class declines -funds from favor, and insurance activity that adds layers. of income/earnings growth through credit investments and real estate debt for several years,” he wrote. Blackstone shares tumbled after news of the solvency limits in December, falling 8% in five days and at the end over ending 2022 down nearly 43%. However, the stock has started to climb back, gaining more than 18% so far this year. Blackstone’s 12-month mountain BX 1Y performance In December, put Blackstone President and Chief Operating Officer Jon Gray defended the company’s structure and position, indicating that investors knew BREIT had solvency limits. “We built the product with constraints on liquidity,” said Gray told CNBC’s David Faber during a “Squawk on the Street” interview. “We described it as semi-liquid because we knew at some point there was going to be a period of volatility, and we didn’t want to sell assets at the wrong time. under ch device.” BREIT outflows are likely to pick up in the near term but should be short-lived, Worthington said. “Blackstone remains best-in-class and an intermediate and long-term winner, so she could hold up near term better than feared,” he said. The BREIT structure remains credible and Blackstone will likely launch new retail products to accelerate the success of the non-commercial structure, he said. Its $105 price target, up from $104, represents nearly 20% upside from Monday’s close. – CNBC’s Michael Bloom contributed to the report.
